Semiconductor Equipment Monitor
-- Semiconductor International, 7/1/2001
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The composite book-to-bill ratio for North America's semiconductor equipment manufacturers declined for the eighth consecutive month during April, according to data compiled by Semiconductor Equipment and Materials International (SEMI). With a reading of only 0.42 during the fourth month of this year, the SEMI book-to-bill ratio fell to the lowest level ever recorded since the association starting publishing the book-to-bill report in January 1991. The value of equipment orders received by manufacturers was an extraordinary 58% lower than the dollar value of shipments this April -- dramatic evidence that chipmakers are exercising extreme caution in making capital investments at this time of great uncertainty about our short-term economic future. In addition, SEMI analysts noted that cancellations of previously reported orders were a significant contributor to the decline in the April orders total.
The value of April 2001 semiconductor equipment shipments was pegged at $1.68B, while new orders during the month were estimated to be worth (a relatively paltry) $713.3M. Bookings have trailed shipments for the past five months, following 24 consecutive months when new orders exceeded the value of semiconductor equipment being shipped from North American factories.
Overall orders to equipment manufacturers plunged by 40.7% between March and April, following a substantial 25.3% loss during the previous month. Since there's still a reasonable amount of work in the pipeline because of the strong orders volume recorded during the second half of last year, the value of product shipments fell by a less precipitous 16.9% during April following an 11.1% drop the month before.
The estimated value of worldwide sales last year was $47.68B, an increase of 87.0% over the 1999 total. Sales had increased by a solid, but much less impressive, 16.2% between 1998 and 1999.
But the market has deteriorated sharply and swiftly during 2001. The value of global equipment sales during the first quarter of this year was only 10.9% higher than over January-March 2000. And the March 2001 sales total by itself was 10.6% lower than during the same month a year earlier. As recently as this January, sales were running more than 44% ahead of the year-earlier level.
Equipment sales growth during 2000 was exceptional across all regions of the globe. The value of semiconductor equipment sold to North American chip manufacturers was up 73.5% from the 1999 sales level, while sales to Japan were 66.2% higher over January-December 2000 than through the 12 months of 1999. And the value of equipment sold into the European marketplace and to the rest of the world (almost exclusively to Taiwan, Korea, Singapore and other nations in the Asia-Pacific region) roughly doubled between 1999 and 2000. Equipment sales to Europe were up 99.1% during the past year, and sales to the rest of the world (i.e., Asia-Pacific) increased by 106.0% between 1999 and 2000.
But what a difference just a few months makes! Through the first three months of this year, sales to Japan were still pretty healthy with a gain of 54.8% from the first-quarter 2000 level. But sales to the other regions of the world were decidedly less robust. The value of January-March 2001 semiconductor equipment sales to North American manufacturers was up 26.1% from the comparable year-earlier total -- not too bad on the surface, but only about one-third as strong as the annualized growth rate recorded just three months earlier. Sales to the European market had fallen even more sharply, with the March 2001 value coming in 8.9% below the March 2000 level, and overall first-quarter sales beating the year-earlier total by a modest 13.6%.
The Asia-Pacific region has fallen the furthest and the fastest so far this year, however. Total January-March 2001 equipment sales were valued 19.4% less than over the first three months of last year. Most disturbingly, sales to the region recorded for the month of March were only two-thirds the level of the March 2000 total.
| Table 1. Equipment Sales Trends by Regional Market | ||||||||
| Billions of U.S. dollars | % Change from a year ago | |||||||
| Total | Projected | Actual | Projected | |||||
| 1999 | 2000 | 2001 | 2002 | 1999 | 2000 | 2001 | 2002 | |
| World | 25.50 | 47.68 | 42.73 | 46.71 | 16.2 | 87.0 | -10.4 | 9.3 |
| Americas | 7.45 | 12.93 | 12.19 | 12.45 | -2.2 | 73.5 | -5.7 | 2.2 |
| Japan | 5.52 | 9.18 | 9.63 | 9.31 | 17.3 | 66.2 | 4.9 | -3.4 |
| Europe | 3.24 | 6.44 | 5.78 | 6.15 | 11.4 | 99.1 | -10.2 | 6.3 |
| Asia/Pacific | 9.29 | 19.13 | 15.20 | 18.81 | 38.4 | 106.0 | -20.6 | 23.8 |
| Historical Data: SEMI | Forecast: Semiconductor International | |||||||
| Table 2. Price Trends (% Change in producer prices, June 1999-June 2000) | |
| All capital equipment for manufacturing | 0.9% |
| All semiconductor manufacturing equipment | 0.3 |
| Wafer processing equipment | 0.2 |
| Assembly and packaging equipment | 0.7 |
| Parts for semiconductor mfg. machinery | 0.0 |
| Source: U.S. Labor Department |
